13.5…the magic number for 2014

ALCI President, Peter O’Toole outlines how work undertaken by the association to secure landscape work as part of the Home Renovation Incentive Scheme could have a huge impact for Irish contractors.

Advance Notice: If you are in a situation where your landscape company suffers greatly from the rare commercial condition of WTMC (Way Too Many Contracts), then there’s no point in reading on and putting yourself under more unnecessary pressure.

The Association of Landscape Contractors of Ireland (ALCI) has been lobbying for a Government backed incentive scheme that would help its members to continue to grow their business. The opportunity fortuitously arose last October when all the stars (celestial – not egotistical Landscape Contractors) aligned over a short period of time to allow the ALCI achieve their goal. The ALCI Annual Awards followed on shortly after last year’s budget, in which the Minister for Finance announced the introduction of the HRI (Home Renovation Incentive) Scheme. The scheme was to allow private individuals to claim back the VAT element (13.5%) of any construction works which they were going to have carried out on their primary residence (between the value range of €5,000 to €30,000). Identifying that this was exactly the scheme which we were seeking, the Minister of State, Mr Tom Hayes’ ear was unapologetically bent during dinner as he, as the guest of honour at the ALCI Awards, was about to make his presentation. We stressed the importance of including landscape works in the proposed scheme. Then, after presiding over the whole awards ceremony, – he admitted to being very impressed – listening sympathetically to our arguments he agreed to a follow up meeting. As a result of the meeting he agreed to put a case to the Minister of Finance to have landscaping included in the bill, which was going through its final draft before being published.

Naturally, great delight was expressed when the good news came through and confirmation that Landscape works were to be included. This result is significant from two points of view: Firstly, it demonstrates the ALCI’s ability to lobby on relevant issues for our industry and being the only association representing landscape contractors in Ireland, we would hope that this result would encourage others to join and build a greater force (strength through numbers). Secondly, and the main reason for pushing for inclusion in the scheme, was that it helps maintain our professionalism in a sector which is plagued by the shadow economy. In so doing, raises the profile of the association, its members and any other tax compliant landscape contractors. It has to be considered an invaluable marketing tool for any professional landscape contractor (apart from those warned off at the start of the article) working in the domestic/private sector.

This comes at a period in the Irish economic cycle when there appears to be a more positive sentiment and attitude towards spending. Whether or not this is based upon anything solid or financially sustainable remains to be seen, but it shouldn’t deter us from preparing and using this scheme to best advantage as we emerge from winter and hopefully the difficult recent years.

In a recent survey carried out on behalf of the Sunday Times (January 5th), entitled ‘Behaviour and Attitudes’ poll, which was measuring the extent of public confidence in the current economy and their plans for spending in the coming year; 23% stated that they were planning to extend or renovate their family home. The challenge then arises in how to generate public awareness of the HRI scheme; How let clients and potential clients know that firstly, the scheme exists, and secondly, that they can claim for landscaping works, either as part of other construction works or preferably as stand-alone works up to the total value of €30,000.

The scheme is only of additional benefit, as a way of generating contracts, if there is greater public awareness. The ALCI is aiming to promote it in all of its marketing campaigns planned for this year. Contractors should include the information, or a summary of it, in all quotations sent out. There will generally be an understanding that the scheme covers building/house renovation works so whenever a chance arises, such as radio programmes and local newspapers, then landscape contractors should try to get the message across that all landscape/garden works are included. It should be included on company’s websites and Facebook posts and on any other leaflet or promotional campaigns. Even with the best advance promotion in place, it will often still come down to the contractor explaining the scheme and spelling out the benefits face to face with the client and hopefully assuring them of the simplicity of implementing it. For this reason, it is essential that those contractors eligible to use it are fully familiar with its workings.

The aim is to have the HRI processed electronically through The Revenue OnLine System (expected to be fully functioning for April). However, it is currently effective and instructions on how to operate it in advance of the online system can be found on www.revenue.ie under HRI. The following is an extract from the web site:

How will the HRI operate electronically?

When the new electronic HRI system is available, Contractors will enter Works Notifications in advance of commencing works. The Works Notification will include a description of the works, the address of the main home where the works will be carried out, the estimated cost of the works including a VAT breakdown, the estimated start and end dates for the works. Homeowners will look up the Works Notification in advance of works commencing to ensure that the Contractor qualifies. Contractors will enter payments received (Payments Notifications) from Homeowners. Homeowners will look up the Payments Notifications as well as entering their tax credit claim.